INVICTA


Equity Release

Introduction

Equity Release is a Financial Services product that everybody has heard of, but which most do not fully understand. In essence, it can be regarded as suitable for consideration by older people who describe themselves as property rich but cash poor. In short Equity Release is simply a mechanism for releasing the money tied up in property ownership and using it to meet the immediate needs of everyday living. It is essential that good and unbiased advice is obtained commensurate with the scale of the transaction.

Getting Good Advice - The introduction to Equity Release above emphasises the need for people contemplating this source of extra spending money to first get good, impartial advice. A good place to begin is to look at how NOT to get good advice!

Bad Advice - A very sure way to risk getting poor advice and poorer service is to simply Google the words ‘equity release'. This will produce a long list of organisations offering ‘advice’ about equity release. Indeed, some of them might actually offer good advice, but the trouble is that almost without exception the bottom line for all will be the promotion of an Equity Release Plan, and there will be no guidance about whether the accompanying advice is good or bad.

Good, Impartial Advice – What is needed is a strategy for tracking down this good, impartial advice. A sensible way to do this is is to start with a preliminary source of advice that has the following characteristics:-

  1. that at no stage does it recommend, or promote, a particular Equity Release Plan,
  2. that it clearly states that equity release might not be the best answer to the problem, and recommends consideration of other solutions first,
  3. that it insists that drawbacks associated with Equity Release Plans are considered before implementation, and
  4. that having help establish that an Equity Release Plan is appropriate, the source should give clear direction to intermediaries and providers who give service and advice of the highest quality
Which? – It is not known just how many sources of such reliable preliminary advice there are, but it must be very few. Saga, for example, lead up to promotion of their own Equity Release Plan. That is why Which? is being recommended as the site to visit for a sound, impartial introduction to equity release.

Features of the Which? siteWhich? is concerned to ensure that the elderly are treated with scrupulous fairness in these transactions, and possibly that is why this is one of the areas for which they provide a free, no strings service. Taking the four criteria above in turn, Which? measures up like this:-

  1. Which? does not promote an Equity Release Plan,
  2. Which? underlines the need to search for and consider alternative, less radical and less permanent solutions,
  3. Which? describes some of the drawbacks of equity release, such as the potential impact on means-tested social security payments, the affect on the expectations of heirs, and the reduction of the means of funding long term care.
  4. Which? gives direction to another site maintained by the Society of Later Life Advisers at www.societyoflaterlifeadvisers.co.uk/ where a list of advisers approved by the Society can be found. Similarly, Which? recommends that the provider should belong to the Trade Association for equity release, Safe Home Income Plans (SHIP) at http://www.ship-ltd.org/
The Which? site is at www.which.co.uk/equityrelease